The British pound weakened sharply to around $1.325, its lowest level since late June, as the US dollar gained after stronger-than-expected PMI (purchasing managers’ activity gauge) data and hawkish comments from Federal Reserve policymakers. The developments strengthened expectations of further US monetary tightening, pressuring sterling. Higher oil prices, amid continued uncertainty over US-Iran talks, also weighed on risk-sensitive assets. In the UK, the latest PMI showed business activity continued expanding in September, although growth slowed slightly and undershot market expectations. Markets nevertheless continue to price in a meaningful probability of a 25-basis-point Bank of England rate increase in November.